TORONTO, June 27 /CNW/ - CNR CAPITAL CORPORATION ("CNR" or the
"Corporation") (PY.P - TSX Venture) announced today that, further to its
announcements of March 26, 2008, April 2, 2008 and June 18, 2008, it has
completed the acquisition of all of the issued and outstanding shares in the
capital of Argonaut Resources Inc. ("Argonaut"). It is expected that the
common shares of the Corporation will resume trading on or about July 4, 2008
under the symbol "PY".
The acquisition represents the completion of the Corporation's arm's
length qualifying transaction (the "Qualifying Transaction") pursuant to the
policies of the TSX Venture Exchange Inc. (the "Exchange"). Upon issuance by
the Exchange of the Final Exchange Bulletin approving the Qualifying
Transaction, the Corporation will be a Tier 2 issuer.
Argonaut was formed in April 2004 in order to acquire, explore and
develop mineral properties throughout Western Canada. At the present time,
Argonaut is involved in a mineral exploration project on two exploration
properties located in north-western British Columbia. Argonaut has not yet
determined whether these mineral properties contain mineral reserves that are
economically recoverable and Argonaut is presently, or planning to, carry out
active exploration efforts on all of its mineral properties. Argonaut intends
to continue to generate and develop its own prospects, acquire mineral
exploration properties directly and indirectly and to participate in joint
venture and other strategic transactions with industry partners.
The Corporation acquired all of the common shares of Argonaut (the
"Argonaut Shares") pursuant to an acquisition agreement dated as of May 7,
2008 (the "Acquisition Agreement"). Each shareholder of Argonaut received
1.25 shares in the capital of the Corporation (each, a "CNR Share") in
exchange for one Argonaut Share. Upon completion of the Qualifying
Transaction, the former shareholders of Argonaut now hold approximately 51.7%
of the issued and outstanding shares in the capital of the Corporation and the
former shareholders of CNR hold approximately 48.3% of the shares. The
Corporation issued a filing statement pursuant to the policies of the Exchange
on June 18, 2008 (the "Filing Statement"), which Filing Statement contains
disclosure on all material terms of the Qualifying Transaction. The Filing
Statement is accessible on SEDAR by viewing the Corporation's public
The Corporation acquired all of the issued and outstanding Argonaut
Shares for an aggregate purchase price of $2,166,144. The purchase price was
satisfied by the issuance of 8,664,575 CNR Shares to the Argonaut shareholders
at a deemed value of $0.25 per share.
There were 8,080,000 CNR Shares issued and outstanding immediately prior
to the completion of the Qualifying Transaction. Immediately following the
Qualifying Transaction, there will be 16,744,575 CNR Shares issued and
outstanding. These shares consist of 8,664,575 held by former Argonaut
shareholders and 8,080,000 CNR Shares held by persons who were shareholders of
the Corporation prior to completion of the Qualifying Transaction.
In addition, there were incentive stock options to acquire a further
808,000 CNR Shares granted to the officers and directors of the Corporation
and options to acquire 408,000 CNR Shares granted to the Corporation's agent
as part of its initial public offering. Pursuant to option termination
agreements executed as part of the Qualifying Transaction, the options to
acquire 808,000 CNR Shares were reduced to options to acquire 450,000 CNR
Shares. Such options are set to expire on or before June 18, 2011. In
addition, on the closing date, options to acquire 1,050,000 CNR Shares (the
"CNR New Options") were granted to the new officers and directors of the
Corporation at a price of $0.25 per share. The CNR New Options will expire on
or before June 26, 2008.
A total of 9,324,676 CNR Shares will be subject to escrow pursuant to the
policies of the Exchange. Of these shares, 5,324,676 are subject to a surplus
escrow agreement (the "RI Escrow Agreement") and 4,000,000 will remain subject
to the CPC escrow agreement dated March 16, 2006 (the "CPC Escrow Agreement").
The provisions of the RI Escrow Agreement permit release of 5% of the escrowed
shares six months after the Final Exchange Bulleting approving the Qualifying
Transaction and a further 5% every six months thereafter for the next
18 months and 10% every six months thereafter for the next 48 months for a
total period of 72 months.
After completion of the transaction, Ray Cook and Charles Chebry are the
only CNR shareholders owning greater than 10% of the issued and outstanding
shares in the capital of the Corporation. Ray Cook owns, directly or
indirectly, 3,362,176 shares in the capital of the resulting issuer
representing 20.1% of the issued and outstanding CNR Shares. Of these shares,
250,000 are subject to the CPC Escrow Agreement and 3,112,176 are subject to
the RI Escrow Agreement. Charles Chebry owns, directly or indirectly,
1,750,000 shares in the capital of the resulting issuer representing 10.5% of
the issued and outstanding CNR shares. Of these shares 500,000 are subject to
the CPC Escrow Agreement and 1,250,000 are subject to the RI Escrow Agreement.
The Qualifying Transaction is an arm's length transaction as the
directors and officers of CNR are not control persons of Argonaut.
As part of the Qualifying Transaction, the Corporation increased the size
of its board from four to five. All of the previous officers and directors of
the Corporation (being Jeff Dawson, John Robins and John Williamson) have
resigned from their respective positions. The following individuals have been
elected directors of the Corporation effective on closing of the Qualifying
Transaction: Ray Cook, Charles Chebry, Craig Bentham, Tell Stephen and Brad
Bakuska. Ray Cook has been appointed President and Chief Executive Officer and
Charles Chebry has been appointed Chief Financial Officer of the Corporation.
Completion of the Qualifying Transaction is subject to final approval by
THE TSX VENTURE EXCHANGE INC. HAS IN NO WAY PASSED UPON THE MERITS OF THE
TRANSACTION AND HAS NEITHER APPROVED NOR DISAPPROVED THE CONTENTS OF THIS
PRESS RELEASE. THE TSX VENTURE EXCHANGE DOES NOT ACCEPT RESPONSIBILITY
FOR THE ACCURACY OR ADEQUACY OF THIS RELEASE.
This news release may contain forward-looking statements based on
assumptions and judgments of management of the Company and Argonaut regarding
future events or results. Such statements are subject to a variety of risks
and uncertainties which could cause actual events or results to differ
materially from those reflected in the forward-looking statements. The
Corporation disclaims any intention or obligation to revise or update such
statements accept as may be required by law.
For further information:
For further information: Charles Chebry, Chief Financial Officer and a
director of CNR by telephone at (403) 454-1297